Pakistan set to have highest level of forex reserves

Islamabad
Pakistan will have the highest ever foreign exchange reserves of the country of more than $18.29 billion by June 30, 2015, federal minister for finance and revenues, Senator Ishaq Dar, said in an exclusive talk with The News.
Currently, Pakistan’s foreign currency reserves stand at $17.491 billion and will touch $18.5 billion mark by end of the outgoing fiscal year.
The minister said that in view of possible inflows of dollars for next six to eight weeks, Pakistan is likely to have the highest level of foreign exchange reserves mainly held by the State Bank of Pakistan (SBP).
It is relevant to mention here that the country’s forex reserves had touched $18.29 billion mark in July 2011 mainly with the help of IMF’s borrowed front loaded money of $8 billion by the PPP government so the real reserves at that time were $10 billion.
“This time the IMF’s money has so far been used to pay back the previous loans obtained by Islamabad,” Dar said and added that Pakistan would have to pay back around $400 million more in order to clear the previous outstanding amount. So far, the IMF’s net lending has not yet started under the existing programme of $6.64 billion Extended Fund Facility (EFF), he clarified.
“Our incremental increase in foreign reserves to the tune of $12.5 billion is mainly because of surge in reserves held by the country’s central bank (SBP)”, he added.
He said that when the PML-N assumed power in 2013 the country’s foreign reserves held by SBP were mere $2.8 billion SBP.
To another query regarding direction of the next budget 2015-16, the minister said that the government would consolidate gains of the macroeconomic stability by restricting the budget deficit to around 4 percent of GDP for the next financial year.
“We are going to allocate around Rs580 billion for development at the federal level (Public Sector Development Programme) in the next budget,” he said and added that the focus would remain on improving all economic indicators in order to share dividends with the people of Pakistan on sustained and long term basis.
In case of increased development allocation, the minister said that it could cause negative impact to other macroeconomic targets so the government would continue its focus on protecting the gains of the macroeconomic stability.
When asked about the direction of the government on tax revenue side, the minister said that so far nothing in this regard was finalised but efforts would be made to maximise revenue collection. He said that the next budget would probably be announced by June 5, 2015.